IT’S NEITHER AN EXTREME OF ADVENTURISM NOR AN EXTREME OF CONSERVATISM, THE APPROACH THAT INDIA’S LARGEST PRIVATE SECTOR BANK, ICICI BANK, NOW SEEMS TO FOLLOW IS THE MIDDLE PATH
It was on May 1, 2009, when Chanda D. Kochhar took the reins of ICICI Bank from her mentor Kundapur Vaman Kamath who had transformed ICICI – a crumbling development financial institution – to India’s most visible universal bank. For Kochhar, who was instrumental in establishing ICICI Bank during 1990’s, and who successfully built the nascent retail business with a strong focus on technology, innovation, process re-engineering and expansion of distribution and scale, the timing of her taking over as the Managing Director & CEO of India’s largest private sector bank was indeed challenging. The going was certainly not great, the global liquidity situation was tight, and it was absolutely a burgeoning task for her to steer the bank through the period of financial turbulence.
It was just a few months (September 2008 to be precise) before her appointment as the MD & CEO of ICICI Bank, that the bank had to confront baseless and malicious rumours regarding its financial strength, as well as news that some of the top management had been selling shares for the last few days. It was around the same time that Lehman Brothers collapsed and given the sparkling timing of the collapse, ICICI Bank faced an unprecedented crisis with speculation mounting that its exposure to Lehman held enough potential to wreck the whole bank. The edgy traders hammered the stock down and nervous depositors queued up outside the bank premises to withdraw their money.
In a short period of two weeks or so, many people had unanswered questions on their mind and withdrew their deposits from the bank. The deposits of Infosys Technologies Ltd. in ICICI bank came down to a mere Rs.100 million from Rs.10 billion over the nine month period (April 2008 to December 2008), citing reasons of “better interest rates and relative safety of deposits”.
But the bank, under the stewardship of Kochhar (who was then entrusted to manage the crisis) was quick to respond to the rumours of bankruptcy. As damage control measures, the top brass came out in the media assuring depositors that their money was safe. The Reserve Bank of India (RBI), too, on September 30, 2008, issued a statement to this effect. But what perhaps was more daunting was the bank coming under fire in the media for allegedly using strong arm tactics to collect credit card and loan outstanding amounts.
It was on May 1, 2009, when Chanda D. Kochhar took the reins of ICICI Bank from her mentor Kundapur Vaman Kamath who had transformed ICICI – a crumbling development financial institution – to India’s most visible universal bank. For Kochhar, who was instrumental in establishing ICICI Bank during 1990’s, and who successfully built the nascent retail business with a strong focus on technology, innovation, process re-engineering and expansion of distribution and scale, the timing of her taking over as the Managing Director & CEO of India’s largest private sector bank was indeed challenging. The going was certainly not great, the global liquidity situation was tight, and it was absolutely a burgeoning task for her to steer the bank through the period of financial turbulence.
It was just a few months (September 2008 to be precise) before her appointment as the MD & CEO of ICICI Bank, that the bank had to confront baseless and malicious rumours regarding its financial strength, as well as news that some of the top management had been selling shares for the last few days. It was around the same time that Lehman Brothers collapsed and given the sparkling timing of the collapse, ICICI Bank faced an unprecedented crisis with speculation mounting that its exposure to Lehman held enough potential to wreck the whole bank. The edgy traders hammered the stock down and nervous depositors queued up outside the bank premises to withdraw their money.
In a short period of two weeks or so, many people had unanswered questions on their mind and withdrew their deposits from the bank. The deposits of Infosys Technologies Ltd. in ICICI bank came down to a mere Rs.100 million from Rs.10 billion over the nine month period (April 2008 to December 2008), citing reasons of “better interest rates and relative safety of deposits”.
But the bank, under the stewardship of Kochhar (who was then entrusted to manage the crisis) was quick to respond to the rumours of bankruptcy. As damage control measures, the top brass came out in the media assuring depositors that their money was safe. The Reserve Bank of India (RBI), too, on September 30, 2008, issued a statement to this effect. But what perhaps was more daunting was the bank coming under fire in the media for allegedly using strong arm tactics to collect credit card and loan outstanding amounts.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
